A proposed merger between food distribution giant Sysco and Restaurant Depot has sparked concerns among local restaurant owners and elected officials, who fear the deal could reduce competition and increase costs for small businesses already facing economic uncertainty.
New York State Assemblywoman Michaelle Solages sent a letter to the Federal Trade Commission last month calling for a review of the proposed merger, arguing that independent restaurants could be disproportionately affected if competition decreases.
Solages said she has heard concerns from restaurant owners who rely on Restaurant Depot because of its pricing structure and flexibility.
"It's no mystery right now. It's easy to talk about how inflation is impacting the bottom lines of not only households, but businesses," Solages said. "And you know this, this news of this merger is very concerning, because we want to make sure that we're protecting competition and protecting small businesses."
She said Restaurant Depot serves a unique purpose for many smaller businesses because owners can purchase products in smaller quantities and avoid delivery fees or minimum orders.
"Restaurant depot plays a unique role. It's not just about another supplier, it's often the only flexible, low barrier option for these small operators," Solages said. "And at a time when restaurants are already facing rising costs, this consolidation is concerning, because it could make things worse."
Solages said she believes smaller businesses and independently owned restaurants could feel the greatest impact if the merger proceeds.
"I think small businesses are small restaurants will be hit the hardest because they don't really have an option," she said. "It's not like, you know, a conglomerate or a franchise."
According to Solages, Sysco representatives contacted her after she raised concerns and assured her they intended to preserve Restaurant Depot’s current business model.
“I've seen this before," Solages said. "If you think about like Home Depot and Walmart, they come into communities, they lower prices, they offer more hours, and then when they destroy the competition, all of a sudden prices raise, and there is no recourse."
She said she supports a closer review by federal regulators.
Solages said she wants a thorough investigation, noting there are still many unanswered questions. She said the agency has the authority to address those concerns and should prioritize consumers and small businesses.
Restaurant owners have also expressed concerns over what a larger market share could mean for suppliers and prices.
Giannis Metekidis, owner of Greek Brothers in Franklin Square and Manhasset, said while his business does not rely heavily on Restaurant Depot, market shifts could still affect smaller operators.
"If they buy like restaurant depot, a lot of businesses are buying from restaurant depot," Metekidis said. "And those are the, you know, the more the more lower end prices."
Metekidis said larger chains and franchises may be better positioned to absorb changes.
"I don't think it's gonna affect in any way the big, large, like scale businesses," he said. "What it's gonna affect is if the market the model, but restaurant people use it right now, if they will keep using the same or they're gonna change their prices, push prices a little higher."
Though Greek Brothers imports many ingredients directly from Greece, Metekidis said pricing trends can spread across the industry.
"Even if, the thing is that even if, like, we might not be buying from them, but if, let's say they raise prices on certain items because they have a 50% of the market share," Metekidis said. "They're gonna follow the market."
Metekidis said his restaurant has avoided increasing prices over the past two years despite economic pressures.
"We still haven't changed the pricing for the last two years. We're proud, very proud, to say that," he said.
